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We live in a world where the lives of the common man are heavily influenced by the Internet.
Imagine waking up at 6 am in the morning and your Mobile notifications pop up the daily weather report since you always check it to plan your day accordingly.
As you step out of the house your Uber app might already know it’s office time and may pop up some good deals for a quick ride to the office. As you approach lunch hour, your food apps might have read your heart and flooded your notifications feed with exciting offers. You might be scrolling through social media and you see ads for products that you have previously searched about, or that you are interested in.
This happens because the Internet of today collects data about our activities and is collected by companies through their apps. This constant interaction between the User and the Web is what we call Web 3.0, but we’ll talk about more of this later.
Background of the Web
The evolution of the Web can be classified into 3 Stages:
- Web 1.0
- Web 2.0
- Web 3.0
Web 1.0 (1991 – 2002)
To simplify, Web 1.0 is a Read-only version of the Internet. It basically consists of a bunch of Websites with some information. Users only search the web to find and consume information. That is why in Web 1.0, the users were also called Consumers.
There wasn’t any logging in, Posting Content on any platform, or viewing analytics. The early web was not even profitable for advertisers.
Another way to look at Web 1.0 is a one big Wikipedia with each page hyperlinked together.
Web 2.0 (2004 onwards)
From 2004 onwards, the internet had evolved a lot, but perhaps one of the biggest changes was the interactivity of the Internet (I would use words like Internet and Web interchangeably).
This means that not only just Users consume data from the Web, but the Web also receives data about us.
Whenever the users are surfing through the net, centralised companies who control most of the Web like Google, Youtube and Facebook, collect our activity data and use it to show us content that will enable us to spend more time on their platforms.
This makes them money. But they soon realised that they can sell this data to advertisers who can use it to optimise their advertising strategy, thus making them more money.
In a Summary,
Web 2.0 is the Age of targeted advertising and the lack of Privacy!
However, to be fair, we do willingly give up this information, as people really don’t care, as long as they are getting information and content to their liking and interest.
So in Web 2.0, the You and Me browsing Facebook.com would see very different feeds, because Facebook uses our activity data i.e, Likes, Video views, shares and other forms of engagement to scoop up content according to our liking.
But if you look at the Ads they show you, then the data utilised behind it comes from data you didn’t know you shared.
For example, if you went to eat burgers at an Eatery, or you drop off your children at school every day of the week except Friday, the Web may know it. The Machine Learning algorithms of these platforms can extrapolate this information based on your activities on the web at any specific time.
There was even this one article which claims that a person was served some parenting ads since the Machine Learning algorithm already knew he was going to become a parent even before he knew himself!
Even if it is not machine learning, it was probably because his girlfriend might have made a search on the web on how to detect the symptoms, from which the AI made conclusions that she might be ovulating.
Whatever may be the case, allowing big corporations to have control of all these user data is definitely scary and a cause of concern.
Introducing Web 3.0
Web 3.0 is the next evolution of the Web, probably using Blockchain Technology and the tools of decentralisation.
But before diving into that, let’s talk about what a Blockchain is.
Blockchain and how does it work
Blockchain is a technique to control data in a decentralised manner. What that essentially means is that there is no centralised hub or server; instead data is stored in thousands of computers or nodes connected to a network called the Blockchain network.
Essentially the fundamental element of a Blockchain network is a block which contains the following things.
- Data
- Hash
- Hash of the previous blog.
Let us understand each of these:
Data
Hash
Hash of Previous Block
This makes the block interlinked with each other.
So here’s an example of what a Block Chain looks like:
This also serves gives additional security since the data cannot be tampered with as changing one data point changes the hash of the current and previous block eventually leading to a chain of changes that would ultimately destroy the Blockchain.
So one a data block is added to the Blockchain, it technically cannot be tampered with.
Some Points about BlockChain
- The entire blockchain resides as a copy in a network of computers or nodes making them decentralised. Some of these nodes are also miners.
- These nodes, verify the data each time it is added to the Blockchain.
What about Privacy?
Since all data resides in a network of computers or nodes, one might wonder how is data kept secure, in other words, What about Privacy?
Privacy is achieved by the use of public-key cryptography. Every node contains its individual private and public keys, Just like an email address and its password.
So any transaction or activity done by the user on the blockchain is accessed by the nodes using the public key of the user. Hence only the action is registered, not the identity of the user which is stored in the private key.
How does Data get Processed in a BlockChain?
Any activity on the Blockchain network is considered a transaction. Let’s say A is sending an amount of Rs 50 to B in the network.
This transaction is carried out only when the majority of the nodes in the network verify the transaction.
In case a particular node gives a false signal, in that case, the transaction is carried out by the simple majority of the consensus of all the responses received from all the nodes.
This exposes a weakness in the blockchain, since if somehow 51% of all the nodes in a Blockchain network are hacked then a particular transaction can be stopped or altered.
This so-called “weakness” is also a strong factor since, provided there are sufficient nodes in a large enough blockchain in different locations, it is impossible to hack 51% of all the nodes at the same time. Hence only a mass hacking event can only defraud a blockchain, although that is extremely difficult and almost impossible to carry out.
Back to Web 3.0
Now that you have received a fairly good idea about a Blockchain and a decentralised network, we can continue with Web 3.0.
In Web 2.0, you the user were the Product, since you are consuming content produced by the Web and the centralised owners of the Web earn money from that.
In Web 3.0 many believe you will be the owner of your Web content. This is kind of true. So if you want to post stuff online, that is still fine, but if your stuff is to be taken down, then you kinda can control that.
Here’s a real-world example of how this work.
In a platform called Odyssey, users get to watch videos and earn library tokens which are used as currency to perform a variety of tasks on the platform. If someone wants to share a video, they technically need to download the video content and let others watch it. Kind of like a torrent for social media.
Odyssey can’t stop a video as it is in thousands of servers in the world that are controlling the blockchain social network.
This actually poses a threat as this may lead to many hateful things being posted on the network. To take down a video a consensus would have to reach among all these nodes to take the video down.
Less Power to Corporates, Rise Of DAOs
In Web 3.0, experts speculate we will reach a state of the internet where institutions, shops and businesses will be administered by groups called Decentralised Autonomous Organisations or DAOs.
These are basically people or nodes in the network with the most tokens or Network Currency. For example, the token for the bitcoin network is bitcoin itself.
This however means that there will be No CEOs or Presidents to impress, instead decisions would be made purely on consensus.
Important Features of Web 3.0
- In Web 3.0 there will be no censorship like on Facebook and Twitter. No central authority can take or even influence major decisions. Changes will be made only through voting.
- Also, your Digital Identity is not 100% connected to your Real-world identity. This means you can post pictures, make trades or sell anything completely anonymously.
- Lastly, you can own your own Web Content in the form of Tokens called Non-Fungible Tokens or NFTs. Here we will be elaborating on that concept.
What are NFTs? How do they Work
A Non-Fungible token or NFT is like a digital token or asset. A common analogy is to think of these as digital trading cards or digital paintings. Whenever you are buying an NFT you are buying the rights to that specific asset.
Non-Fungible means, it cannot be changed when it is created and it should be distinguishable and unique. Unlike a coin such as bitcoin, 1 bitcoin = another bitcoin.
But all NFTs are unique and are always different, and the token is a small piece of data that you own. Together, an NFT is a token that you own that doesn’t change throughout time.
Now we have had an overview of the nature of NFTs, let’s understand what is an NFT technically is.
Technical Aspect of NFT
NFTs are just a piece of data that is owned by an address. And whoever has the password to that address, owns that piece of data. That data can be bought and sold to different addresses and that data is verified in a blockchain and the cool thing is that the owner’s history can also be tracked in the network.
Let’s take this kitty example:
This kitty sells for $600,000.
So What happens when you buy NFTs?
Whenever you buy NFTs, you only own a piece of data that points to a server which hosts that image. However whoever owns that server can change the image, so mostly NFTs are hosted on blockchains which is owned by a collective of nodes.
That is why it is important to know what you are buying. As buying an NFT means owning only a piece of data that points to something on the internet. Owning an NFT doesn’t really give you anything.
Why buy an NFT?
The only reason right now people buy NFTs is that they can be sold as collectables in the investment category. Here are 4 reasons why people would buy an NFT:
- Being the First of its Kind
- Utility or Real-World Benefits
- Unique or Rare
- Ownership History
Being the First of its Kind
For example, Pokemon Cards have great value and the most expensive card is probably the first card. Similarly, the first NFT minted by someone or belongs to a popular category may be more valuable than they seem.
Utility or Real-World Benefits
Imagine the World Class Chef Gordon Ramsay, minting only 50 nfts in his lifetime. And if you own any of those nfts, you would get one free dinner at any Gordon Ramsay restaurant and 30% off henceforth.
This alone will instantly shoot the price of these NFTs. Hence the real-world benefits of an NFT can change its value.
Unique or Rare
Imagine Stephen Hawkings only ever minting three nfts. Those NFTs, even if they are a glimpse of space, would be really valuable, since they are rare.
Ownership History
If a particular NFT was owned by a popular person before, for example, Robert Downey Junior, then that alone might shoot up the price of that NFT.
Types of NFTs
- Art
- Collectible
- Domain Names
- Music
- Photography
- Sports
- Trading Cards
- Utilities
- Virtual Worlds.
How to Buy, Set Up and Sell and NFT?
In this example, we will talk about how to own and mint a domain name NFT and how to list it on NFT marketplaces like opensea.io.
Step 1: Buy a Domain
- Go to unstoppable Domains(https://unstoppabledomains.com/)
- Type a domain name and see if it’s available
- Create an account with email and connect your Crypto Wallet.
- Checkout with your Favourite Domain Name. You can pay through credit card, Crypto or Paypal.
Step 2: Mint your Domain
You can use the Free Mint option which uses Polygon Matic to mint your new domain. After minting your domain will be assigned to the particular wallet connected to Unstoppable Domain.
Step 3: Manage your Domain
- Finally, it’s time to manage your domain
There are 3 Ways in which you can design your website:
- Using a Template.
- Copy the Source Files of another Website.
- Link to an existing Domain.
Clearly, the easiest way to set up a Domain (if your goal is to sell it as an NFT) would be to use a template.
Here’s what we did for ThatWare.
How to List your Domains as an NFT on OpenSea?
Step 1: Open opensea.io and create an account by connecting your Wallet.
Step 2: Tap on create and give the necessary info to create your NFT.
Step 3: Minting the NFT on Ethereum will take some fees. So if you want to avoid that you can mint on Polygon.
Finally, your NFT is ready for Sale on the OpenSea platform.
The Future of Decentralized Identity in Web 3.0
As we move further into Web 3.0, one of the most significant transformations will be the evolution of digital identity. In today’s Web 2.0, digital identity is centralized and controlled by corporations. Your identity is tied to your social media profiles, email accounts, and the various platforms you use. Your personal data is stored on company servers, leaving you with little control over how it is used or shared.
However, Web 3.0 promises a future where digital identities are decentralized, giving users greater control over their personal data. Blockchain technology will play a crucial role in this shift by enabling self-sovereign identities (SSI). SSI allows individuals to own and control their identity without relying on a central authority. This means that instead of companies controlling your digital persona, you will hold the keys to your own data.
With a decentralized identity, users can have a secure and verifiable online presence without revealing unnecessary personal information. For example, instead of logging into a website with a traditional username and password, users might authenticate themselves using a blockchain-based system, where their identity is verified through cryptographic methods. This could include the use of digital wallets, private keys, and biometrics to ensure a higher level of security and privacy.
Benefits of Decentralized Identity
- Greater Privacy: Users can choose to share only the necessary information with the platforms they interact with. For example, instead of giving away your age, location, or even your email address, you can control what data is shared.
- Security: With blockchain’s inherent security features, personal data can be protected from data breaches. Since the data is distributed across a network and encrypted, it becomes extremely difficult for hackers to access or alter the data.
- Reduced Identity Theft: By decentralizing identity verification, it becomes harder for malicious actors to impersonate users or steal their personal information.
- Interoperability: A decentralized identity system will work across different platforms and services, allowing users to seamlessly interact with the Web without having to create new accounts or provide information repeatedly.
The Role of NFTs in Digital Ownership
While NFTs (Non-Fungible Tokens) are primarily associated with digital art and collectibles, they have the potential to revolutionize digital ownership in Web 3.0. Beyond just owning a piece of art or music, NFTs could represent ownership of any digital asset.
For example, NFTs could be used for virtual real estate in metaverses, where you own and control parcels of land or digital objects in virtual worlds. These digital assets would be unique and verifiable, ensuring that you are the rightful owner of that virtual space or item.
Moreover, NFTs could be used for intellectual property rights. Imagine owning an NFT that represents the copyright or patent to a piece of technology, an invention, or even a song. The blockchain would record the entire history of the NFT, including past owners, sales, and licenses, providing a transparent and secure way of managing digital property.
Blockchain and Web 3.0: The Implications for Businesses
Web 3.0 and blockchain are not just transformative for individuals, but they also present a massive shift for businesses and organizations. The traditional model of centralized business operations, where control is held by a few powerful entities, is being challenged by the rise of decentralized technologies.
The Impact on E-commerce and Online Transactions
One of the most significant changes that Web 3.0 will bring is the decentralization of online transactions. Today, e-commerce platforms rely on centralized payment processors and banks to facilitate transactions. However, blockchain enables peer-to-peer transactions without the need for intermediaries. This will result in faster, cheaper, and more secure transactions for both businesses and consumers.
For businesses, accepting cryptocurrency payments through blockchain networks like Bitcoin, Ethereum, or even stablecoins could reduce transaction fees and international transfer costs. Moreover, businesses could create smart contracts—self-executing contracts where the terms of the agreement are written into code. These contracts automatically execute when certain conditions are met, removing the need for intermediaries like lawyers or banks.
Decentralized Autonomous Organizations (DAOs)
DAOs are one of the most exciting aspects of Web 3.0 for businesses. A DAO is an organization that is governed by smart contracts and blockchain technology rather than a central authority. Decisions in a DAO are made through voting by members who hold governance tokens. These tokens could be earned by contributing to the organization or through a proof-of-stake mechanism.
In a DAO, ownership and decision-making are distributed among stakeholders, eliminating the need for a CEO or centralized leadership. This could disrupt industries that traditionally rely on hierarchical organizational structures, including finance, entertainment, and even politics. Businesses in Web 3.0 could be run more democratically, with all members having a say in the direction and operations of the organization.
Decentralized Finance (DeFi)
Web 3.0 also promises to revolutionize the financial services industry through DeFi (Decentralized Finance). DeFi refers to a set of financial services, including lending, borrowing, trading, and investing, that are built on blockchain technology. Unlike traditional financial institutions, DeFi platforms are decentralized and do not rely on intermediaries such as banks.
With DeFi, anyone with an internet connection can access financial services without the need for a traditional bank account. This could have a significant impact on individuals in underserved regions where traditional banking infrastructure is lacking. It could also open up new opportunities for investors, allowing them to participate in global markets without relying on centralized financial systems.
Ethical Considerations and Challenges in Web 3.0
As promising as Web 3.0 and blockchain technologies are, they also raise several ethical concerns and challenges that need to be addressed.
- Environmental Impact: The energy consumption of blockchain networks, particularly proof-of-work systems like Bitcoin, has been a topic of controversy due to their significant carbon footprint. However, newer consensus mechanisms like proof-of-stake and layer-two scaling solutions are being developed to reduce energy consumption.
- Regulation: As blockchain and decentralized technologies grow, governments and regulatory bodies will need to find ways to govern these systems without stifling innovation. Finding the right balance between regulation and decentralization will be crucial in ensuring the long-term success of Web 3.0.
- Access and Inclusion: While Web 3.0 offers the potential for greater privacy and ownership, there is a risk that the technology could exacerbate digital divides. Ensuring that everyone has access to the necessary tools and knowledge to navigate Web 3.0 will be essential in creating an inclusive and equitable digital future.
Thatware | Founder & CEO
Tuhin is recognized across the globe for his vision to revolutionize digital transformation industry with the help of cutting-edge technology. He won bronze for India at the Stevie Awards USA as well as winning the India Business Awards, India Technology Award, Top 100 influential tech leaders from Analytics Insights, Clutch Global Front runner in digital marketing, founder of the fastest growing company in Asia by The CEO Magazine and is a TEDx speaker and BrightonSEO speaker.
